Saturday, January 14, 2012

ProShares Debuts Specialized Inflation ETFs

ProShares launched the ProShares 30 Year TIPS/TSY Spread (NYSE: RINF - News) and the ProShares Short 30 Year TIPS/TSY Spread (NYSE: FINF - News). Both ETFs are designed to provide exposure to breakeven inflation, which is a widely followed measure of inflation expectations.

RINF seeks to match the performance of the Dow Jones Credit Suisse 30-Year Inflation Breakeven Index, before fees and expenses. FINF aims for inverse of the daily performance of the Dow Jones Credit Suisse 30-Year Inflation Breakeven Index, before fees and expenses.

'Many investors are focused on inflation and closely follow breakeven inflation, a common yardstick for inflation expectations,' said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares' investment advisor. 'We are pleased to offer investors the first ETFs linked to this important economic indicator.'

Breakeven inflation aims to isolate the market's expectation of inflation implied by the difference in yields between Treasury Inflation Protected Security (TIPS) and Treasury bonds. The Dow Jones Credit Suisse 30-Year Inflation Breakeven Index tracks the returns of a long position in 30-year TIPS and a short position in Treasury bonds.

Both ProShares ETFs charge annual expenses of 0.75%.

AdvisorShares Offers New Sector ETF In other ETF news, AdvisorShares launched a sector ETF called the AdvisorShares Rockledge SectorSAM ETF (NYSEArca: SSAM - News). The sector fund's strategy is designed to invest in the top performing U.S. industry sectors, while hedging by short selling the sectors expected to have the lowest or negative returns

New York-based Rockledge Advisors is the portfolio manager of SSAM. The company will use its proprietary quantitative analytical system known as the Sector Scoring and Allocation Methodology which helps Rockledge determine specific conditions in both economic and business cycles. Rockledge evaluates whether a sector is cheap or expensive, given the cycle relative to the rest of the market and will invest (be long) in the undervalued sectors while avoiding (be short) the overvalued sectors.

SSAM's net expense ratio is 1.50%.

Alex Gurvich, Co-Founder of Rockledge and portfolio manager of SSAM said, 'The U.S. economy goes through various growth cycles, which means there should be relative sector variation at all times. We rotate investments between the U.S. economic sectors based on our proprietary evaluation in order to try and outperform the overall market. We believe that the prudent investor, who understands the risk vs. reward tradeoff, should be looking at sector investing vs. individual stocks. Holding a position in a sector can provide inherent diversification while reducing individual company risk.'

AdvisorShares is based in Bethesda, MD.

PowerShares Adds Low Vol ETFs

InvescoPowerShares added an emerging markets and international developed equity ETF that attempts to minimize stock market volatility.

'Given today's market environment, investors are naturally seeking better ways to reduce volatility in their portfolios,' said Ben Fulton, Invesco PowerShares managing director of global ETFs. 'We believe the PowerShares family of low volatility ETFs may provide investors a degree of protection in down cycles while still participating in upward trending cycles, and have the potential to improve risk-adjusted returns over the long term.'

The PowerShares S&P Emerging Markets Low Volatility Portfolio (NYSEArca: EELV - News) contains 200 of the least volatile stocks within the S&P BMI Emerging Markets Low Volatility Index.

The S&P Emerging BMI Plus LargeMid Cap Index includes all publicly listed equity securities with float-adjusted market values of at least $100 million and annual dollar value traded of at least $50 million from the following countries: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, South Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey.

The PowerShares S&P International Developed Low Volatility Portfolio (NYSEArca: IDLV - News) contains 200 of the least volatile stocks within the S&P BMI International Developed Low Volatility Index.

The S&P Developed ex US and South Korea LargeMid Cap BMI Index includes all publicly listed equity securities with float adjusted market values of at least $100 million and annual dollar value traded of at least $50 million from the following countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

EELV's annual expense ratio after the temporary fee waiver is 0.29%, while IDLV charges 0.25%.

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